Client says W-2 incorrect - court case pending

[Argo]

Client says the W-2 is incorrect and wants me to report the amount she says is correct. It's a 740 dollar difference in taxable wages. This would result in $60 in additional refunds.

Can I do this?

How?

Should I do this?

[Cathy]

Can I do this? NO

How? N/A

Should I do this? NO

I would tell client to contact employer and request a W-2C. If the client is unable to provide a W-2C, I would tell client that I could file a paper return for him/her explaining his/her position to IRS. I would further tell client that my additional filing fee would be more than the $60 and IRS might not accept her position and it would cost her more than double the $60 in that case.....

Take care,

Cathy

[Gail in Virginia]

And even to do a paper file return with a difference like this, I would want some explanation/evidence to explain why the W-2 is incorrect. Remember, you sign the return as well as the taxpayer. But if the W-2 is actually incorrect, and the taxpayer has all their pay stubs to substantiate the difference, and the employer refuses to correct the W-2, then and only then would I paper file with a substitute W-2 and very good explanation.

[TAXMAN]

I did this once with a 1040-X and attached the last 4 paystubs as proff that the original w-2 was incorect. Employer refused to correct W-2. IRS accepted and refunded the difference. BTW filed original with W-2 as though it were correct. TP's refund was more than the cost of fixing. Just my take. Yours may be different.

[David1980]

If unable to get a correct W-2 by February 15th I'd consider a 4852. Assuming the taxpayer's got good documentation as to what correct is.

[jainen]

>>Can I do this?<<

Not yet, but maybe with more information.

>>How?

Form 4852, which requires an explanation of attempts to correct the original W-2.

>>Should I do this?<<

Certainly, if the client is right. That's why IRS has the form

My first guess for $740 would be about the last paycheck of the year or prior year. Or it may be a reimbursement or fringe benefit, a salary advance, or a problem with new software. Lots of possibilities, so the client needs to ask the bookkeeper for clarification.

[Medlin Software, Dennis]

A common misunderstanding, both employEE and employER, is believing when the money was earned matters. One or both may be thinking the W-2 should include wages "earned" during the year instead of the proper wages "paid" during the year.

[Medlin Software, Dennis]

Forgot to add, seeing more cases of incorrect SSN on W2 this year, as states stop allowing the full SSN on the pay stub.

[Argo]

Thanks everyone!

This is what I needed.

[Cathy]

And even to do a paper file return with a difference like this, I would want some explanation/evidence to explain why the W-2 is incorrect. Remember, you sign the return as well as the taxpayer. But if the W-2 is actually incorrect, and the taxpayer has all their pay stubs to substantiate the difference, and the employer refuses to correct the W-2, then and only then would I paper file with a substitute W-2 and very good explanation.

You're positively correct! One of my client's W-2 indicated $1.30 in Federal withholding when the correct withholding was over $28,000. Offshore gulf worker that the employer incorrectly classified as a foreign worker. Rather than correcting W-2 and payroll reports, etc.... client was told that he had to let a CPA firm they deal with prepare his tax return. He refused upon my advice as the CPA firm was going to prepare his return as if he had worked in foreign waters. I prepared the form to correct the W-2 that was filed with his paper return along with documentation of 9 months of correspondence with employer. Client received a timely refund from IRS.

Amazing what the oil and gas industry employers are trying to pull with their employees pay since the BP spill! Another client's oil and gas industry employer even filed an annual report with the SEC stating that they relocated their company overseas, therefore, they and their employees will no longer owe US income tax! Their U.S. employees still report to the same office in Houston, TX and still work in U.S. territories. They went on to state they will not register with the new country's tax office and will not pay any income taxes in their new location! Can't believe they had the audacity to file this info with the SEC!